The Reserve Bank of Australia interest rate announcement and statement from Governor Lowe is due at 0330GMT
Nearly everyone expects the Bank to leave the cash rate unchanged (currently 0.75%). Out of the 33 analyst opinions collated by Bloomberg only 6 expect a cut (to 0.5%). ING do (I posted their preview yesterday) along with Barclays, Deutsche, Credit Suisse and Scotia a local securities firm
Via Daiwa:
Despite concerns about
- the impact of the bushfire crisis not least on confidence and tourism,
- the impact of the coronavirus on Chinese demand,
- and still subdued inflation,
the stronger employment report a couple of weeks ago saw expectations of an imminent rate cut fall considerably.
And, while there would be justification for a further cut - the RBA is likely to continue to forecast sub-target inflation across the projection horizon when it publishes its quarterly Monetary Policy Statement on Friday - on balance, the RBA will likely want to wait a little longer for further more information about the various impacts on activity and inflation from recent shocks before easing policy further.
To contrast, Scotia do expect a cut:
- Most expect the RBA to stay on hold at a policy rate of 0.75% aided by recently firmer inflation figures, but the freshest shocks to the outlook include fires primarily across the southeast and the coronavirus.
- new information
- the larger potential impact arrives via the outlook for export prospects to China and the surrounding region plus the impact upon Australia's terms of trade given its significant reliance upon commodities
As I said yesterday on the post with ING's reasoning calling for a rate cut, it makes sense to me. But given the timidity of the RBA under its current leadership I'm in the on hold camp.
Earlier previews:
- RBA meet today, Tuesday 4 February 2020 - preview
- Here's an RBA preview looking for a cash rate cut - meeting Tuesday 4 February 2020
- Preview of the RBA interest rate meeting on Tuesday 3 February 2020 (& AUD impact)
- RBA policy meeting February 4 - to keep interest rates on hold - preview
- RBA monetary policy meeting next week, February 4. Preview.
- The aussie is in a very delicate spot ahead of the RBA decision next week
- RBA to keep rates on hold next week - Reuters poll
